Which of the Following Statement Is Incorrect Regarding the Investing

question 66

Multiple Choice

Which of the following statement is incorrect regarding the investing activities section of the statement of cash flows?

• A) Investing activities deal with long-term liabilities (debt)and equity accounts.
• B) Increases in long-term asset balances suggest cash outflows to purchase assets.
• C) Decreases in long term asset balances suggest cash inflows from selling assets.
• D) Investing activities involve cash purchases and cash disposals of long-term assets.

---

Definitions:

Earned

Earned typically refers to income or revenue that has been generated from businesses activities or investments and is recognized upon the delivery of goods or services.

Clients

Individuals or entities that receive services or products from a business in exchange for payment.

Liability Insurance

Insurance that provides protection against claims resulting from injuries and damage to people and/or property, covering legal costs and payouts for which the insured party is responsible.

Prepaid

Expenses that are paid for in advance of receiving the benefit, often recorded as assets until the expense is incurred.